I have thought about atmega + camera idea too, but for use on atmega not sending. I looked at CMUcam but it wasn't so low-cost as it was advertised (100$ it too much). I found http://www.robotshop.us/sfe-cmos-camera-640-480.html . It seems cheap, microcontroller friendly and so on. Only problems are - SMD connections, killer programming and impossible debuging.
So, all thoughts and good links are welcome.